Barclays signals more branch closures are on the way as profits double

Barclays Bank branch closures

Barclays has warned it may move to accelerate its transformation programme in the UK before the year’s end while reporting record group profits for the first nine months of 2021.

It revealed that “structural cost actions” were on the way in its branch-based UK arm as the sector continues to shrink high street sites in favour of shifting customers towards online banking – a trend aided by the COVID-19 pandemic.

The move follows a new round of branch closures at rival Lloyds just this week.

Barclays made the announcement while reporting year-to-date pre-tax profits of £6.9bn – its best ever performance for a nine-month period.

It included a £2bn haul for the three months to 30 September – nearly double the £1.1bn seen a year ago – and £400m higher than financial analysts were expecting.

The performance during 2020 has been driven by activity at its investment banking arm which, like its US rivals, has reaped bumper fees from a surge in advisory mandates and equities trading.

Profits in the division were 49% up at £4.8bn over the nine months, Barclays said.

The group’s bottom line was also boosted by £622m of cash – set aside last year to handle pandemic-related bad loans – which it had released in the year to date despite continuing pressures in the domestic and wider global economy.

Barclays chief executive Jes Staley said: “While the CIB (investment bank) performance continues to be an area of strength for the group, we are also seeing evidence of a consumer recovery and the early signs of a more favourable rate environment.”

The bank upgraded its economic forecasts for the UK and said it expected the country’s GDP to hit pre-pandemic levels by early 2022.

But it warned that significant uncertainty remained on the path ahead and shares were trading slightly lower in early deals.

Zoe Gillespie, investment manager at Brewin Dolphin, said: The bank still looks one of the best positioned among its peers, with exposure to markets beyond the UK and an offering that covers retail banking, business lending, credit cards, and investment banking.

“A progressive dividend and appropriate levels of share buybacks could continue to drive enthusiasm for its shares, which are comfortably up on where they started the year.”